Show the changes in economic conditions with diagrams
Know when an economic diagram is required to answer certain questions
Foremost, you must be able to interpret the question requirements correctly. Some questions merely require economic causation and analysis while others require models to visualise examples of economic implications. Policies such as monetary and fiscal require the use of Aggregate Demand/Aggregate Supply diagram analysis to depict the movement of the country’s demand and supply when the policies are implemented.
Draw your economic diagram systematically to minimise errors
To start your diagram illustration, it is important that you draw the curves in organised ways. For example, for demand and supply analysis, you should draw the initial demand and supply curves first. Avoid drawing all the curves together. In addition, sketch your curves in pencil to allow the ease of modifications in your diagram illustration.
Label the points of intersections to emphasize on the changes within the economic diagram
After the diagram has been drawn, label the intersection points by numbering them. For instance, the initial demand curve is labelled as D0, whereas the new demand curve is labelled as D1. Similarly, indicate the new price and output as P1 and Q1 respectively. As such, the examiners can identify the changes occurring within the economic diagram, which are required for mark allocation.
Explain your economic diagram in an organized and concise paragraph
Following the diagram illustration, you should state your intent to refer to the diagram clearly. For example, start the paragraph with the following phrase “with reference to the diagram”. Then, describe the direction of change within the diagram, seen in terms of the shifts and movements along the curves. The paragraph should conclude with an end-result being described, such as the attainment of market equilibrium.
Check your diagram and explanation to avoid careless mistakes
Once you have completed your economic diagram illustration and interpretation, it is imperative that you allocate time to review both parts. For the diagram drawing, pay attention to the labelling of axes and intersection points. As for the paragraph development, you should keep your explanation precise and clear, so that the examiners can follow your flow of argument easily.